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Market Wrap (recording & summary)
Wednesday’s opening test completed a bullish setup that all but required retesting the overnight high [view a video description of the setup here]. That was 15 points above the open’s low, and it still was only one of the session’s most impressive features. There was the relentless slope through the morning and into the afternoon bias environment. And there was also the two-hour narrow hovering at session highs.
Of course, relentless steep trending often reflects corrections. Durable trends contain consolidations, backing-and-filling, and generally refuel buyers. An extended tends to mean that the counter-party is granting an easement. Slightly higher highs testing 2461.00 is still a possibility, if not also 2469.00. Even 2477.00 could be touched before reversing down, all within the context of being only a temporary correction.
Details and other markets coverage are discussed in the post-market Wrap recording here.
Monitor overnight Globex trading in the chaRTroom here.
Daily Spot…
A daily summary of high-profile members of several complexes… View a more detailed discussion of each chart at the end of today’s Market Wrap.
Eurodollar Sep Contract (EC, ETF: (FXE, UUP))
How over-extended was the rally? Monday’s rally to and through 1.1945-1.1970 had extended Tuesday night to test 1.2080. Its intraday session-long reaction down Tuesday had nevertheless stopped optimistically short of actually filling the gap back to Monday’s close just under 1.2000. Wednesday’s open leap-frogged under 1.1945-1.1970 to consolidate back down to 1.1900. A second consecutive lower close would reverse the trend down for a deeper pullback. Otherwise, any delay in extending down would keep alive the near-term potential for retesting Tuesday night’s high.
Gold Dec Contract (GC, ETF: (GLD))
Holding Tuesday’s retracement to the 1318.50 pullback limit didn’t prevent extending down overnight to the 1310.50 sell signal. Touching pre-open and post-open held through the close to avoid triggering. But 1318.50 wasn’t recovered, which would indicate Monday night’s 1332.00 high was being retested.
Silver Dec Contract (SI, ETF: (SLV))
[Rolling coverage forward to Dec, which trades at a 10-cent premium to Sep]… Gapping down slightly Wednesday stopped short of retracing the 17.30 buy signal that had triggered Monday, keeping alive the potential for a near-term retest of Monday night’s 17.75 high on the way to the 17.90 target.
30-year Treasury Sep Contract (US, ETF: (TLT))
Tuesday’s pullback from 158-04 had extended just enough at Wednesday’s open to touch Monday’s “lower prior highs” at 156-25. The delay suggests an even deeper dip to at least 156-16 before reversing up to retest Monday night’s high.
Crude Oil Oct Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
More narrow ranging into Wednesday’s session avoided a fresh low, but still hovered above Tuesday’s fresh low without rejecting it and the 45.50 target in-play.
Natural Gas Oct Contract (NG, ETF: (UNG, UNL))
Tuesday’s bounce up to 2.98 was unable to close higher, and reversed back down to test the 2.94 sell signal Wednesday. Thursday morning’s EIA report is not being greeted from a position of strength, although testing the 2.84 target would help to complete the bottoming pattern.
Mid-day Update… Still pushing it.
Morning’s buy signal still intact.
A reward for absorbing the overnight sellers was at least to retest the 2454.25 overnight high. Having probed above yesterday’s high, exiting the open under the overnight
low would have reversed momentum down. But trying to reverse down, and failing, would deserve a reward.
The open only temporarily probed the 2445.25 overnight low by 2-1/2 points. And now the overnight high is being probed up to 2458.75.
That’s this afternoon’s bias-up target. Like this morning’s 2457.50 target that was never triggered, each is likely only temporary resistance. Just having recovered 2448.00 and 2454.00 has already put into play 2461.00. And then 2477.00 could be tested or attacked, too.
Simultaneously overbought 1-minute and 3-minute RSIs at the high require its retest if reversed down now. A reversal has room down to 2452.00 before beginning to signal the rally is done. Otherwise, resolving up would next target 2461.00.
Look ahead: Economic Calendar – for Thu Aug 31, 2017
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Thursday’s two pre-open reports may inform last-minute estimates ahead of Friday’s payrolls report, but neither has a reliable track record for influencing price action. However, any impact by them is likely to be duplicated by post-open reports. One of which is the high-profile reliably influential Chicago PMI. It is released privately to its institutional subscribers, and their reaction is often duplicated when released publicly.
Challenger Job-Cut Report
7:30 AM ET
Jobless Claims
8:30 AM ET
Personal Income and Outlays
8:30 AM ET
*Chicago PMI
9:45 AM ET
Bloomberg Consumer Comfort Index
9:45 AM ET
Pending Home Sales Index
10:00 AM ET
EIA Natural Gas Report
10:30 AM ET
Fed Balance Sheet
4:30 PM ET
Money Supply
4:30 PM ET
Afternoon Bias
| WED afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2454.00 | 2453.00 |
| …would target | 2459.75 | 2458.75 |
| Bias-down: under | 2448.50 | 2447.50 |
| …would target | 2442.50 | 2441.50 |
| Signal status: BIAS-UP | FAQ | |
| INTRO VIDEOS #1 and #2 | ||
1. At 1:20, trading above the bias-up signal or under the bias-down signal would put into play a test of its bias-up or bias-down target.
2. Not triggering either bias signal at 1:20 would be “no-bias,” and the bias signals should define the bias environment’s range.
— A test of the opposite bias signal would be targeted if one bias signal was tested before triggering no-bias.
3. Touching the bias signal within 3 minutes either way of 1:20 would invoke a grace period through 1:30 to trigger a late signal.
— “Late” signals don’t require testing the opposite bias signal, but it’s still likely.
4. Still testing the bias signal at 1:30 after invoking the grace period would trigger “noN-bias,” with no bias influence.